Weekly Economic Update – April 11, 2016

WEEKLY QUOTE

“True friends are those who really know you but love you anyway.” – Edna Buchanan

WEEKLY TIP

Own a business? Think about having an accountant look at your books several times a year. Having a professional opinion on your books can be valuable at any time, not just tax time.

WEEKLY RIDDLE

Three women each have two daughters.
They are all having dinner at a cafe.
The café has but seven chairs. All the women are seated. How is this possible?

Last week’s riddle:

You have 7 onions in a bag, and you will distribute them to 7 people. As you finish handing them out, there is still 1 onion left in the bag. How is this possible?

Last week’s answer:

As you hand out the last onion, you leave it inside the bag.

FED: APRIL MIGHT BE TOO SOON FOR A RATE HIKE

That was the message Wall Street gleaned from the Federal Reserve’s March policy meeting minutes. Several Fed officials, the minutes stated, felt that “raising the target range as soon as April would signal a sense of urgency” that would be untimely. Another passage noted broad support for “a lower path of the federal funds rate relative to December” (in other words, a shallower ascent for the benchmark interest rate across 2016). Still, some officials saw merit in an April rate move should economic indicators show significant upside.1

PACE OF GROWTH PICKS UP IN THE SERVICE SECTOR</b

In March, the Institute for Supply Management's non-manufacturing Purchasing Managers Index rose 1.1 points to 54.5. It was the first gain for that PMI in five months. The index had a reading of 56 or higher during most of 2015.2

OIL JUMPS 8% IN A WEEK; GOLD, SILVER ALSO RISE

West Texas Intermediate crude settled at $39.72 a barrel Friday, its weekly ascent aided by a 6.6% Friday gain helped by an announcement of declining rig count. Gasoline futures were up 4.4% for the week. April 4-8 also represented the best week for gold and silver since mid-March (in fact, it was silver’s finest week in over a month). Gold advanced 1.7% in five days on the COMEX, closing Friday at $1,243.80 an ounce. Silver futures rose 2.0% in the same interval, settling Friday in New York at $15.38 per ounce.3,4

STOCKS LOSE SOME GROUND

A rocky week ended with 5-day losses for each of the major indices: the S&P 500 fell 1.21% to 2,047.60; the Nasdaq Composite, 1.30% to 4,850.69; and the Dow Jones Industrial Average, 1.21% to 17,576.96. Even so, all three benchmarks were up at least 3.4% month-over-month at Friday’s closing bell.5

THIS WEEK: Earnings season starts Monday as Alcoa presents Q1 results. On Tuesday, earnings emerge from CSX Corporation and Fastenal. Wednesday, investors consider March retail sales numbers, a new Fed Beige Book, the March PPI, and Q1 results from JPMorgan Chase and Pier 1. New initial claims figures and the March CPI arrive Thursday, plus earnings news from Bank of America, BlackRock, Delta Air Lines, Progressive, and Wells Fargo. Friday offers the preliminary edition of the University of Michigan’s April consumer sentiment index, a report on March industrial output and earnings announcements from Charles Schwab, Citigroup, Regions Financial, and Seagate Technology.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+0.87
-1.82
+8.40
+5.81
NASDAQ
-3.13
-2.02
+14.89
+10.74
S&P 500
+0.18
-1.65
+10.83
+5.81
REAL YIELD
4/8 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.14%
0.08%
0.95%
2.43%

Sources: wsj.com, bigcharts.com, treasury.gov – 4/8/166,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

Best regards,

Greg R. Solis, AIF®
President and CEO

Bob Medler, CRPC, CMFC, AIF®
Wealth Advisor / Investment Analyst

78-075 Main Street
Suite 204
La Quinta, CA 92253
Office: (760) 771-3339
Fax: (760) 771-3181

www.soliswealth.com
E-Mail: greg.solis@lpl.com
E-Mail: robert.medler@lpl.com
CA Insurance License #0795867

 

The Wealth Advisors of Solis Wealth Management are also Registered Representatives with and securities and advisory services are offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

The information contained in this email message is being transmitted to and is intended for the use of only the individual(s) to whom it is addressed. If the reader of this message is not the intended recipient, you are hereby advised that any dissemination, distribution or copying of this message is strictly prohibited. If you have receivedthis message in error, please immediately delete.

P.S. You have my permission to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – tinyurl.com/jsu4hrx [4/7/16]
2 – businessinsider.com/ism-non-manufacturing-and-markit-services-pmi-2016-4 [4/5/16]
3 – marketwatch.com/story/oil-rebounds-but-doha-meeting-remains-a-cloud-on-the-horizon-2016-04-08 [4/8/16]
4 – marketwatch.com/story/gold-snubbed-for-riskier-assets-clings-to-weekly-gain-2016-04-08 [4/8/16]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [4/8/16]
6 – markets.wsj.com/us [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F8%2F15&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F8%2F15&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F8%2F15&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F8%2F11&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F8%2F11&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F8%2F11&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F7%2F06&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F7%2F06&x=0&y=0 [4/8/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F7%2F06&x=0&y=0 [4/8/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/8/16]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/8/16]